The Northeast Poised to Become Solar Giant Driven by State Incentives

According to a Standard and Poor's analysis released today, the Northeast is well positioned to become the country's solar leader.

Swami Venkataraman cites the below table breaking down state solar incentives along with locally high retail electricity rates and declining panel costs as the primary drivers behind this market expansion.

Venkataraman goes on to point out that while these are laying the groundwork for potential success for solar developers in this region, several important factors could keep growth stunted including slow financial markets, unavailability of tax equity, and permitting problems. He emphasizes throughout the article the importance of these incentives to the cost-competitiveness of solar.

Venkataraman's article perfectly outlines the importance of a variety of regulatory structures that can effectively promote renewable energies. State and local policies are filling the gaps in federal policies and the finance drought across the country.

At the recent RETECH 2010 conference organized by the American Council on Renewable Energy (ACORE), Mayor George Fitch of Warrenton, VA was just one of the delegates to a panel on state and local programs. During his presentation on the Town of Warrenton's 2MW landfill gas to power plant, he drove the point home saying, "the financing only works on these small-scale projects with federal and state incentives."

Renewable energy's future does not look like a solar panel on every roof or a windmill in every back yard, but rather it will be a localized effort with generation suited to the location. Could it then make sense to likewise control certain policy incentives and also distribution controls at a similarly regional or local level? Could that negatively impact the financing climate for these systems, to have hundreds of different incentives and policies to keep track of? Finance and banking is often not accomplished through hometown local lenders anymore. Will national or international banks be willing to gamble on a county ordinance? They may decide to require additional guaranty instruments to protect their interests.

Ultimately I think that as the industry grows, so will the comfort level of all types of lenders including your hometown savings and loan. Renewable energy has always had a grassroots element to its nature and that can be an asset for adapting locally to different policies and needs.